Tom Sosnoff is the founder and Co-CEO of tastytrade, which is a fast-growing online financial network that produces eight hours of live content each weekday.
The content includes general financial information, investment strategies and entertainment related to options trading and the stock market. He also founded thinkorswim in 1999, which was a breakthrough options-trading platform before it was sold to TD Ameritrade in 2009 for $750 million.
Previously, Sosnoff was a market maker for the Chicago Board Options Exchange and one of the original OEX traders in the S&P 100 Index pit. Sosnoff seeks to educate retail investors in options trading through the tastytrade network and to provide a software platform and a brokerage firm that specializes in options called tastyworks.
With a goal of providing know-how to individual and entrepreneurial investors, Sosnoff speaks publicly and did so in August 2018 at the San Francisco MoneyShow. His advice is offered in the following question-and-answer session.
1. What is your best advice for a young investor starting out in options trading?
“The most difficult thing for young investors is to just get started. The mistake that most millennials make when it comes to money and investing is that they don’t learn two things at a very young age. One is that they don’t learn to make decisions. Two is that they don’t learn to take risks. Two of the most important things you can do in life, when it comes to growing your entrepreneurial sense and investment skills, are to take risks, and learn how to assess and apply risks. Most millennials today are passive investors. Very few are active. When they are active, they tend to look for asset speculation. That’s why the bitcoin craze happened. What I’d love to see is a generation where they learn to be strategic. The focus around being strategic is that you learn how to take risks, learn how to assess risks, learn how to make decisions and make decisions quickly. What we’re looking for when 21 and 22-year-olds come looking for a job is someone with strong math skills and people that can make quick decisions. The domain you can learn. But being able to assess risks in your head through some kind of math equation, and then being able to apply that to an actual efficient and functional market, is what most people lack.”
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2. What is your favorite options trading strategy?
“In the options world, I use a lot of different strategies, but if I had to pick one, it would be a short strangle.”
3. What is your current day-to-day role and some of your task involved with that role?
“I am the Co-CEO of tastytrade. I do a live-show on the tastytrade network. I answer a lot of emails. I trade. And I run the business. I’m kind of the visionary for the company.”
4. How did you first become involved in options? What was your background that led you to that point?
“When I got out of college, the first job I had dealt with options. I didn’t know what I was getting into, but I fell in love with it and have been doing it for 37 years.”
To learn more about Sosnoff and his views, go to the tastytrade network where he hosts a live show daily.